Mt Gox issues a statement about the shutdown

Mt Gox Logo
Mt Gox has issued a statement on their website about their sudden shut-down after several weeks of issues. Here is what the MtGox team wrote:

Dear MtGox Customers,

In the event of recent news reports and the potential repercussions on MtGox’s operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,

MtGox Team

Mt Gox used to be the world’s largest Bitcoin exchange. Websites that were tracking trading on the Bitcoin exchange are reporting that there is no trading activity on MtGox. Bitcoin’s price dropped by around 14% to $465 after that news. MtGox blocked withdrawals for over two weeks due to software issues. The leaders of the six Bitcoin organizations issued a statement that they are pledging to work together to restore integrity to the Bitcoin community.

Below is the statement:

The purpose of this document is to summarize a joint statement to the Bitcoin community regarding Mt.Gox.

This tragic violation of the trust of users of Mt.Gox was the result of one company’s actions and does not reflect the resilience or value of bitcoin and the digital currency industry. There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants.  As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.

We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that bitcoin offers as the future of payment in the Internet age.

In order to re-establish the trust squandered by the failings of Mt. Gox, responsible bitcoin exchanges are working together and are committed to the future of bitcoin and the security of all customer funds. As part of the effort to re-assure customers, the following services will be coordinating efforts over the coming days to publicly reassure customers and the general public that all funds continue to be held in a safe and secure manner: Coinbase, Kraken, BitStamp, Circle, and BTC China.

We strongly believe in transparent, thoughtful, and comprehensive consumer protection measures. We pledge to lead the way.

Bitcoin operators, whether they be exchanges, wallet services or payment providers, play a critical custodial role over the bitcoin they hold as assets for their customers.  Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading.

The following industry leaders stand by this statement:

Fred Ehrsam — Co-founder of Coinbase

Jesse Powell — CEO of Kraken

Nejc Kodri? — CEO of Bitstamp.net

Bobby Lee — CEO of BTC China

Nicolas Cary — CEO of Blockchain.info

Jeremy Allaire — CEO of Circle

 

The shutdown of Mt. Gox is rumored to have been caused by a hack or security breached that caused a loss of 744,000 Bitcoins, which was worth around $409,200,000. This is not the first time that Mt. Gox was hacked. In 2011, Mt. Gox was hacked and 400,000 Bitcoins were stolen then. At that time, those Bitcoins were worth $9 million. The hackers attempted to sell $9 million worth of Bitcoin simultaneously on the Mt. Gox network and it caused the market price to crash to zero, according to Forbes. Mt. Gox recovered by publicly apologizing and reimbursing the lost funds then.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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